Committing to certainty

Legislature's offer of continuity to Nike should be extended to others as well

The most enduring benefit of Friday's special legislative session could be that it focused lawmakers' attention on providing more certainty in business regulations.

Comment

By The (Salem) Statesman Journal

MailTribune.com

By The (Salem) Statesman Journal

Posted Dec. 22, 2012 at 2:00 AM

By The (Salem) Statesman Journal
Posted Dec. 22, 2012 at 2:00 AM

» Social News

The most enduring benefit of Friday's special legislative session could be that it focused lawmakers' attention on providing more certainty in business regulations.

Just last month, some legislative candidates were being derided in campaign advertising as tools of corporate interests. Yet last week, many legislators — at Gov. John Kitzhaber's behest — were falling all over themselves to serve the tax interests of one of Oregon's most powerful corporations, Nike.

It was the right move. Not because of Nike's political power, but because of Nike's economic power.

Legislators gave the governor the authority to guarantee corporations that their state income tax formula wouldn't change as long as they promised to create at least 500 new jobs in the state and make capital investments of at least $150 million. Nike sought that assurance, and Kitzhaber quickly called the special session to provide it and thus deter the athletic gear company from expanding in another state instead of Oregon.

But legislator after legislator made another important point: Businesses of all sizes need certainty, not just behemoths such as Nike, so they can plan their growth. Institutionalizing that certainty — in tax law, clean energy credits, land-use planning, agency rules and other areas — should be a focus of the 2013 Legislature.

That doesn't mean those laws and regulations need to be weakened to attract businesses and to create jobs. Rather, it means the state should provide long-term continuity.

As Ryan Deckert, leader of the Oregon Business Association, told the Statesman Journal last week, it can be unnerving for a company to ponder a significant expansion when the tax ramifications might soon change. Not only does the Legislature consider tax changes every year, but it's relatively easy for any organization with enough money to put a measure on the ballot. Two very different groups — Realtors and public-employee unions — won voter approval of their tax measures at the Nov. 6 election.

Nike wanted the state's long-term assurances that it would continue to be taxed on its profits in Oregon, not on its overall global operations. That's a reasonable concern for all businesses, especially if it means they can expand in Oregon.

However, governments deserve certainty, too. Nike now must live up to its end of the bargain, as it's been tight-lipped about what its planned expansion would entail.

Friday's special legislative session should be just the start. Oregon can gain a tremendous economic development advantage over other regions if it becomes known as The State With Business Certainty.